Clinton Sees Consensus for Action on Economy : Conference: President-elect says meeting produced agreement on health care costs, public investment.

President-elect Bill Clinton closed his two-day economic conference Tuesday by declaring that it demonstrated a broad consensus on the need to control health care costs, increase public investment and embark on an effort to bring fundamental change to the nation’s economy.

“There were some significant differences, but what I found most striking was the fundamental agreement on several critical points,” Clinton told reporters at the close of the gathering, which brought together 329 leaders of U.S. business, academia, government and other sectors.

Specifically, Clinton said, the conference produced a consensus for action in four areas: increasing investment in infrastructure, training and education; improving access to capital for small business; developing a “balanced approach” between the new investments and long-term deficit reduction; and controlling the growth of health care costs.

“We can’t do anything else on the deficit if we can’t curb the monster of spiraling health care costs,” Clinton said.

All the conclusions Clinton cited as part of the consensus reflected positions that he espoused throughout his campaign. He offered no evidence that he had changed his mind on any of the ideas he has viewed skeptically--such as capping federal entitlements or raising gasoline taxes.

Once again, for example, he said he would consider new gasoline taxes only in conjunction with offsetting tax reductions that would soften the impact on the middle class.

Indeed, throughout the two days, Clinton did not suggest any significant departures from the detailed economic plan he laid out during the campaign. What he did demonstrate, however, was a formidable skill at shaping the debate--and defining the nation’s problems--in a way that pointed toward the solutions he has proposed.

In moving to define the diffuse ideas that emerged from the event as a consensus behind the broad outlines of his own program, Clinton demonstrated again a fundamental element of his communications and public relations strategy: presenting his agenda as an outgrowth of ordinary Americans’ concerns, rather than as a politician’s plan dictated from the top down.

At the end of the event, aides--who were somewhat apprehensive going in--pronounced themselves delighted and hinted--as did the President-elect himself--that there would be more such conferences.

Aides said such sessions could be a powerful tool for Clinton to use in building support for his proposals. “Imagine if Clinton did another one of these and said at the end: ‘Write your congressman,’ ” one aide said.

But despite Clinton’s characterization of the meeting, it also was clear that many experts who attended held views divergent from his own. From the business community, Clinton repeatedly heard calls for deregulation that would put him in direct conflict with his environmental and liberal supporters.

And a large number of speakers told him that long-term economic health will require a more aggressive attack on the federal budget deficit than he has yet suggested. Participants repeatedly spoke in support of additional spending cuts--such as capping entitlement growth--or raising new revenues, perhaps through levies to discourage the use of gasoline or other fuels associated with global warming.

In particular, Clinton received a stern lecture from Brookings Institution economist Henry Aaron, who warned him to balance the calls he had heard for new spending against the need to control the deficit.

“The call for increased spending and for tax breaks . . . is endless,” Aaron said. “These claims are tangible and easily understood, ad many of them are deserving of approval. But unless the public recognizes that the excessive federal deficits infect the economic hopes and aspirations of U.S. businesses and U.S. workers, the deficit and the pain it inflicts are going to persist indefinitely.”

Even Alice Rivlin, Clinton’s choice for deputy budget director, urged consideration of gasoline taxes and so-called carbon taxes on the use of fossil fuels.

“To the extent that we must increase government revenues to reduce the deficit, and I believe we have to face that, we should be thinking of taxing the things we don’t want to happen: pollution and excessive use of energy,” Rivlin said. “That means perhaps gas taxes, perhaps carbon taxes.”

But as throughout the campaign, Clinton stated again Tuesday that he believed new spending in education and public works aimed at spurring long-term growth must be at least as much a priority as deficit reduction. “If you don’t get growth, I don’t care what our budget plan says, the deficit will be bigger than we estimate because the revenues won’t come in,” Clinton said.

During Tuesday’s session, Clinton stressed his conviction that only by stemming health care costs can the country gain control of its budget and reverse its economic problems.

The President-elect said the cost of an economic stimulus program is “peanuts” compared to the sums involved in health care.

“We are kidding each other,” Clinton said at one point, thumping his fist on the table. “We are all just sitting around here making this up if we think we can fiddle around with entitlements and all this other stuff and get control of this budget, if we don’t do something on health care.”

The current health insurance system “is a joke--it’s going to bankrupt this country,” he said.

Clinton noted that another speaker had urged him to propose his major policy ideas during the first “honeymoon” months of his presidency. If that speaker was right, “and I think she is, then we’ve got six months to do something on health care,” Clinton said.

While the session unearthed few new policy proposals, many who attended praised the way it had laid out the nation’s economic problems and underscored some areas of agreement about how to correct them.

Its other goals were to build Clinton’s support before he proposes a tough legislative package and to strengthen his ties with leaders in business, academics and government.

“I think this is the most remarkable and memorable conference I have ever attended in my career of attending a lot of conferences,” said James Tobin, a Yale University economist and Nobel laureate who advised President John F. Kennedy.

The conference also brought Clinton some generally favorable--if still cautious--reviews from the business leaders whose support he needs to advance his programs.

Robert Cizik, chief executive of Cooper Industries Inc. and president of the National Assn. of Manufacturers, said he was impressed by the way Clinton handled himself.

“A conference like this can do a wonderful job of educating the American public,” he said in an interview. “It’s the bully pulpit.”

But he said that while business leaders were impressed by Clinton’s skill and knowledge, they are still waiting for the Democratic President to make a move.

“They’re going to be very cautious--is he going to be a different kind of Democrat, like he said?” Cizik asked.

Tobin was among several economists who urged Clinton to launch a short-term economic stimulus program to accelerate the economy sufficiently to renew job growth. He recommended a spending-and-tax-cut program worth $60 billion in its first year and $50 billion in its second.

Rejecting warnings that such a stimulus would increase the deficit, Tobin argued that by allowing the economy to stagnate, fiscal “austerity would be counterproductive.” It “would actually damage the prospects for our grandchildren rather than improving them.”

Allen Sinai, chief economist of the Boston Co., recommended a stimulus package of about $20 billion to $30 billion--about the figure Clinton has recently used. “The U.S. economy is not growing fast enough to create enough permanent new jobs,” Sinai said.

He said the stimulus program should be ready to go early next year, but he cautioned that he believed the idea should be shelved if there are more signs the economy is strengthening.